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Karl Schembri
A Broadcasting Authority report published online which purportedly has “confidential parts omitted” can be read by anyone who has the full version of Adobe Acrobat reader. The confidential parts include the most sensitive commercial information about private and political radio and television stations.
Drawn up by Grant Thornton on commission by the BA, the Business Study on national radio and television services contains figures and graphs related to the stations’ advertising revenue, audience ratings and advertising agencies’ practices and the audit firm had specifically asked that these should remain withheld from publication.
But the report was published on the BA’s website last Wednesday and some parts of it have already been leaked on The Times. A particularly revealing ‘confidential’ section shows that the two political stations lost almost Lm3.4 million over a period of eight years between 1995 and 2002.
“Although both political radio & TV stations claim that they are run on a commercial basis, they have been running at huge losses for a number of years,” the BA report says. “During the eight-year period reviewed, Media Link (the PN’s television station) lost almost Lm1.9 million, an average of Lm233,000 per annum and never made a profit or came close to breaking even during the period. Likewise, One Productions lost Lm1.5 million (before other income) during the eight-year period, an average loss of Lm190,000 per annum.”
The report states that both stations’ financial performance “deteriorated considerably” between 1998 and 1999.
“One Productions continued on this decline during 2000-2002 and registered its highest ever loss of Lm377,000 in 2002. Media Link appears to have achieved some turnaround and cut losses from Lm351,000 in 1999 to Lm195,000 in 2002.”
In another ‘confidential’ section the report states: “Although political parties are known to have embarked on fund-raising campaigns using their media as the main driving force to collect funds from the party faithful, such revenue finds its way to the party and is not invested in the radio station.”
Political stations have seen drastic changes in their relative advertising market shares, the report states.
“In 1995 when Super One was the only political station broadcasting on both radio and TV, it enjoyed 78 per cent of the political group’s market. This situation remained virtually unchanged until 1998. With the launch of Net TV in 1998 Media Link rapidly increased its market share, to the extent that during 2000 and 2001 it surpassed One Productions in advertising revenue, albeit only marginally.”
The following year One Productions re-established itself as the leader, capturing 53 per cent of the market of its group and 26 per cent overall.
One Productions continued to experience a steady growth in turnover even while, with its new TV station, Media Link was generating two to four times its previous revenues.
“This further substantiates the hypothesis that Net TV managed to tap viewers who were not previously tuning in to Super One and hence created its own market. It could also indicate, however, that demand was surplus to existing capacity at the time.”
As regards radio stations, Bay Radio stands out with an audience share of just 10 per cent as opposed to a staggering 25 per cent share of the radio advertising market in two years consecutively.
“The advertising shares of Radio 101 and RTK on average reflected their audience ratings, whereas all the other stations experienced advertising shares well below their respective audience shares,” the report states. “The stations that were least able to capitalise on their audience shares were PBS and Super One… Despite a substantial increase in audience share, from 14 per cent to 21 per cent, PBS maintained the same share of advertising revenues, and hence failed once again to profit from its leading position.”
The report’s main conclusion is that the broadcasting market “offers little growth prospects”, recommending that no more new stations are given a licence as they would threaten the livelihood of the existing ones – a veritable stop to the drive of pluralism launched in the ‘90s.
karl@newsworksltd.com
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